on 18 January, 2011 Email this Email this - Print this Print this

You always read about how important it is to get bookkeeping systems in place, why you need to have a good bookkeeper, how to find a good cashier, but this article is different.

Lisa Newton, founder of CoreLegal and the Boogles bookkeeping franchise, recounts some real life solicitors’ bookkeeping horror stories. Names and dates have been changed to protect the innocent. When it goes wrong it can go very, very wrong…

The consequences of what can (and does) happen when solicitors don’t choose the right legal bookkeeper.

1. THE CASHIER RAN OFF WITH THE LAPTOP

Sometimes, you can’t win. We know a solicitor who tried to do the right thing – they got in help. They used a legal cashiering company who sent in a cashier to do their bookkeeping for them. However, the Cashier stole the laptop and the accounts system with it. But it was difficult for the cashiering company to come clean because they had actually changed the accounts package that the solicitor was on – without letting them know!

So the solicitor had bought a completely new accounts package (at considerable cost) – and it wasn’t even being used! They were paying for software support that wasn’t needed. And the reason the cashiering company had switched it over – was because they just liked to work on their favourite one. They weren’t willing to learn anything new.

The bookkeepers kept changing, and hardly turned up when they were supposed to, they’d put funds in the suspense account and then accused the clients of owing them money. The bank reconciliation had differences and they made them pay a VAT penalty.

Despite all of that – they still stuck to that legal cashiering company because they could not find an alternative. They were scared to move, as they thought everyone operated like that anyway!

2. WORK (NOT) DONE OFF SITE

The bookkeeper had been doing their books for 5 years. The bookkeeper would come on site 1 ½ days a week – most of the time to just take things home and bring back what had been done. (And he was charging them handsomely for this). One day the solicitor got a visit from the VAT man to say the VAT had not been paid. The solicitor was not aware of this. They contacted the bookkeeper who promised he would come in and sort things out. He never did.

Fancy that. Where are your records? Does your bookkeeper keep taking things home? How can you be sure that things are being done as they should be?

Upon investigation of their books it was found that the bank reconciliation had not been done for 6 months (although partners were given something to sign off every month). The trial balance had been altered to make the figures agree. Bill payments were not being allocated against the correct office bills and £450k work of unallocated funds were placed in a suspense account for payments of bills where the bookkeeper could not be bothered to find ledgers for! Bills were being posted out of period causing differences with the VAT account. Cheques had been posted to ledgers with different amounts to what had debited at the bank and client ledgers were over drawn.

This Cashier had been paid handsomely for the work and when it all went wrong – he just disappeared. He never ever came back, didn’t answer his phone and left them with the problem. If it was a company that you were dealing with (like in the situation above), at the very least, they cannot just walk away from you. They’ll sort out the mess that they cause, because they have to. They’re a business in existence – not a one man band.

3. SELF EMPLOYED BOOKKEEPERS

Solicitors’ bookkeeping is unlike anything else. So be careful when choosing an accountant – you need one specialising in law firms. Often solicitors think in ‘qualifications’ – they think that an accountant ‘must’ know more about legal bookkeeping than the bookkeeper – not necessarily. Don’t make that mistake.

In this situation the bookkeeper very rarely turned up. When they did it was 3 o’clock in the afternoon and when the solicitor wanted to lock up and go home at 6 o’clock the bookkeeper was not happy. They were always behind by 2 or 3 months due to being self employed, poorly organised and trying to get in as much work and money as possible.

The job worked out to be 1 days work every 2 weeks when the bookkeeper was taking 2 days every week. They were also persuaded to change their software package because the bookkeeper was unable to use any other one. The list just went on and on.

Don’t be part of the horror stories.

  • Choose reputable legal bookkeepers, regulated by the industry, with a practise certificate – so that you can report them if you have to.
  • Test them. Don’t just take their word for something – follow up on references.

If you already have a legal cashier / bookkeeper who you aren’t quite sure about – we do on-site audits / checks. And (for a fee) we can look over their work – at your discretion (a time when they’re not there) to put your mind at rest that everything is as it should be.

It’s your practice, your firm, your livelihood. Don’t let someone else come along and ruin things for you.

Boogles Ltd

www.boogles.org

t: 020 3371 8894

f: 08712 449 500

e: admin@boogles.org


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Topics: bookkeeping · smaller law firms
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1 response so far ↓

  • 1 Jason Cobine // Feb 8, 2011 at 10:18 am

    Getting behind can only lead to more problems. And fines are not usually insured.

    Thanks for the reminder.

    @jasoncobine

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